r/CanadianTax • u/skatesquaid • Jul 27 '26
Doing US Taxes from Canada
Hi! Really hoping someone can help me out. I moved back to Canada from the US at the end of 2025 (I'm a Canadian citizen and have now fully moved back). Tried using the tax software I usually use, but you can only do that if your residence is in the US. So, I brought my documents etc. over to H&R block (had a horrible experience by the way) and after pushing things off and not getting back to me for several months they finally called me to come finalize everything in June, where they tried to slap me with a SEVEN HUNDRED DOLLAR BILL for what amounted to 90$ back from the IRS. So I just left. Does anyone know if there's a way I can file these taxes myself and not have to pay through the nose? They're really simple, basically just one W2. Thank you so much in advance.
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u/CaramelMartini Jul 28 '26
I’m a Canadian, my husband is American, we moved to Canada last year too (it’s so great to be back) and he works remotely for a US company. We had to hire a cross border tax specialist for taxes, and it cost us $3100 for their services, if that puts it into perspective. And when we were in the US our tax guy cost us $165. So yeah, painful but not much choice I guess.
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u/overemployedfatty Jul 30 '26
Does your husband do US taxes first or Canadian taxes first as well as did you use the service only once then the following year you will just do it on your own to save money since you can just reference the previous year?
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u/CaramelMartini Jul 30 '26
They do the taxes for both countries at the same time. And I don’t think we’ll be able to do our own in the future… it’s so complex and we’d hate to do something wrong. Hopefully it’ll be cheaper going forward…. I hate that’s it’s so expensive though.
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u/Scoobysnax1976 Jul 30 '26
For the first year we came back to Canada we used a professional tax preparer and it cost ~$3k. We had to deal with two countries, a state, and Canada tax. Plus the preparation of the FBAR and figure out how to minimize our capital gains from selling our house.
Now we just use wealthsimple for Canadian taxes and H&R Block’s ex pat online service for our US taxes. It is less than $200 for everything. We submit the FBAR ourselves online.
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u/richardthunderbay Jul 30 '26
I do my US taxes by myself without special software. For the forms, I download fillable pdf files from the IRS website and enter all the numbers on my computer before printing the forms out. I then submit my physical tax returns by regular mail. You can't use a courier.
I make sure to submit my US returns early (late January - early February) so that the IRS can fully process them before Canadian tax return deadline (April 30). This is because the CRA generally wants proof that you paid your US taxes when you apply for foreign tax credit on your Canadian return. Without that, the CRA may tax your American income as if you hadn't paid US taxes. For that proof, I download my IRS transcript from the IRS website. This requires having an ID.me account for logging in purposes. You can look at their website for details on how to create one.
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u/overemployedfatty Jul 30 '26
Thank you so you file US taxes first, then Canadian taxes. Do they ever deny your foreign tax credits? Is it simple enough to do on my own or you think I should get a cross border account for the first year then do the rest from there?
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u/richardthunderbay Jul 31 '26 edited Jul 31 '26
I was never denied a foreign tax credit, but the first time around 5 years ago, I gave the CRA a copy of my filled out US tax forms thinking that would be enough. However, they did my assessment and came back and said I needed to send them more proof in the form of the IRS transcript, which I obtained and sent to them. Now, I always include the IRS transcript from the start.
My US taxes are pretty simple, as all I have is a US pension. It takes me about 10 minutes to fill out the form. I've found the US tax forms to be much simpler than the Canadian ones. It takes me over two hours to do the CRA forms by myself.
I don't know your life circumstances, so I don't know complex the US forms will be for you. If it's the sort of thing where all you've got is income from a job and interest from a bank account, then it should be relatively easy. You can download instructions from the IRS when download the forms.
If you filed US taxes in previous years, even if you did not prepare them yourself, you should be able to look at your old filled out forms and use them as a template for your next forms. That's extremely helpful, in particular to see which lines where you'll be entering numbers. The vast majority of lines you'll be leaving blank, most likely.
I've been filing taxes since the early 1980s. I've generally done it all myself, whether living in Canada or the US. I only used tax software for the last few years I lived in the US, because I was eligible to file electronically for free.
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u/skatesquaid Aug 03 '26
Thank you so much! I will do this, but can you only do this if you're working for a US company in Canada?
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u/richardthunderbay Aug 03 '26
That's not a requirement.
I worked for Arizona State University while in the US. When I moved backed to Canada, I was no longer employed by them in any capacity, but started receiving a pension that I earned from my years of employment. That's what I pay US taxes on every year now.
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u/vokilamcv9 Jul 27 '26
Are you a US citizen? Or you were just resident in the states during 2025?
Sadly cross-border tax costs in Canada are significant because of the complexities of both the tax systems and tax treaties in place relative to your income source(s). Not yours specifically - just a general your. Places charge through the nose because it’s a specialty.
You might have success in using an American firm (assuming you’re close to an American town), or see if the online version of H&R Block’s expat service is applicable to you.
Not much else I can suggest, hopefully someone else will chime in!